Will you be one of the people leaving your wealth to the Chancellor rather than your loved ones?

Posted on 26th January 2017 by Streets What's trending?


Image to represent Will you be one of the people leaving your wealth to the Chancellor rather than your loved ones?

According to Treasury figures, the Revenue’s receipts for Inheritance Tax received in any one year has reached an all time high of £4.3bn.


Whilst increased property values may be, in part, a reason for this increasing number the reason is more likely to be that people still don’t consider, or realise, that to a great extent payment of IHT is voluntary. With effective tax planning it can be possible to reduce, even mitigate fully, the amount of IHT paid on the death of a loved one.

Why then don’t people look at inheritance tax planning? There seems to be a number of reasons, not least the fact that perhaps few of us want to consider our own mortality. More likely than not many of us don’t realise we have potential liability or that our net worth exceeds the IHT threshold - currently £325,000 for a single person and £650,000 for a married couple and civil partners. This may also be the reason why more than 50% of people do not have a will. Why is this important? The absence of a will invariably means that no inheritance tax planning is in place.

Still, it does seem hard to comprehend that such reasons are significant or meaningful enough for people to prefer to leave more of their estate than they are required to the Chancellor as opposed a loved one, or in their eyes a more worthy cause.

With an ageing and generally better off society it would not be unreasonable to think that the Revenue’s receipts for IHT are, in the absence of any tax planning, likely to increase year on year,  not least as the thresholds are not likely to increase significantly.

Given this background and with indications that those born after the 1970’s increasingly expect to inherit wealth from their parents, surely it must be time to consider not only what you would like to happen to your estate but also how you might ensure more of what you have goes to those you really want it to. The benefit of such tax planning could be that your beneficiaries and family benefit from financial support whilst you are still around, with help for a new car, first house or the cost of education forming part of your ‘legacy’.

For most the starting point really is getting to grips with the value of their assets, often much more than just the house they live in, with other investments, business assets and life policies contributing to their net worth.  Once known, then thoughts can turn to plans of your intentions and to reducing the potential IHT liability, a task for which your tax adviser is well placed to assist with.


No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.


Expert insight and news straight
to your inbox

Related Articles


Merger gives us a greater footprint in the West Midlands, with Wales in our sights!

We are delighted to announce the establishment of Streets Dyke Ruscoe Limited. The announcement follows the merger of the well-established and widely respected Shropshire and Worcestershire practice of Dyke Ruscoe Chartered Certified Accountants with ourselves. This latest merger has enabled us to establish a greater footprint in the West Midlands, ...


We are excited to introduce our new Virtual Finance Office service - ViFi

At ViFi, we specialise in providing virtual finance solutions that transform the way businesses manage their finances.ViFi is your virtual finance department, offering comprehensive remote financial services. From day-to-day bookkeeping to proactive financial planning, our team in the UK ensures that you have everything a traditional accountant offers, ...


You might think that your payroll is high now, but it is going to get even higher next April

The first Labour Budget in 14 years was supposedly billed as being one to drive growth, though it is hard to see how this will come about as from next April, businesses face increased costs of employing people with the rise in the national minimum wage to £12.21 ...

You might also be interested in...